Europe becomes a refuge from chip selloff as STOXX 600 barely moves

what happened

According to Newsmetry API, European equities held up far better than Asian and US markets during the chip selloff, with the STOXX 600 down only 0.2%. Chipmakers took heavy losses. ASMI and Aixtron fell 9%, Infineon, BE Semi and ASML each lost more than 6%, and Siemens Energy, which had also benefited from the AI trade, slipped into negative territory.

Meanwhile, many less fashionable stocks climbed. Ericsson led the STOXX with a 7.7% gain after beating earnings expectations. The food and drink and insurance sectors rose 1.7% and 1.6%. Zurich added 2.4% after a broker upgrade, Lindt gained 4.5%, and the Swiss market index rose 0.46%. London's FTSE 100 was up 0.3%, while Germany's DAX slipped 0.4%. Bonds also firmed as the tech rout pushed yields lower, giving a boost to rate-sensitive stocks.

why it matters

Money moving out of chipmakers into defensive and less crowded names, alongside firmer bonds, points to a shift in investor sentiment within European equities. Lower yields also support stocks that are sensitive to interest rates.

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